Sonic Adventure 2 was a little inconsistent when it came to the size of the Master Emerald. Normally it was fairly large, but at one point, Knuckles held the emerald in his hand. This could mean that it is possible to shrink the emerald down. But rather than get into that now, I'll just say that if it is possible, Knuckles is the only one who can do it. As far as you know.

The Master Emerald still wasn't complete, but unlike SA1 where the pieces fit together, their mass combined into a smaller Master Emerald... then he got the rest of the pieces just as the credits went on screen.

...remember, SEGA made the Sonic games. characters and items strangly changing size is probably copyrighted by Nintendo, take Mario for example :)